$47M Lease Ranks Among Largest in Region

LOS ANGELES-Two city agencies have renewed for 170,000 sf of office space in a $47 million lease at the Garland Center, at 1200 W. Seventh St. in Downtown Los Angeles, making it one of the largest office transactions in Southern California thus far in 2008.

The two agencies renewing in the 10-year lease are the City of Los Angeles Community Development Department and the L.A. Department of Housing, according to senior vice president Jason Warner of CB Richard Ellis, who represented Charter Holdings Inc. a wholly owned subsidiary of Wells Fargo that is the master-lessor of the Garland Center. The renewal is one of two significant office leases involving CBRE brokers in recent days, including a 17,640-sf deal in Century City at 1888 Century Park East.

The City of Los Angeles, which is one of the long-time major subtenants in the Garland Center, was represented by David Kluth of UGL-Equis and Mark Sullivan of Studley. The city will occupy approximately four and a half floors in the 724,000-sf building, which includes three lower levels, two stories of data center space, nine stories of office space and ground-level retail.

Warner points out that when Charter Holdings announced its intention last year to extend its master lease on the Garland Center beyond Feb. 28, 2009, “It opened up the ability to move forward with both sublease renewals for current subtenants in the building, as well as the marketing of vacant space to new subtenants,” Warner says. He notes that improvements are well under way to model the Garland Center “around current market trends in office, retail and critical infrastructure space.”

The Garland Center is undergoing an approximate $35 million infrastructure improvement project that will add significantly to its utility power, back-up power and mechanical equipment. The upgrades are designed specifically to accommodate the needs of existing and future critical facility subtenants.

In the Century City lease, the Reznick Group signed a 12-year deal for the 17,640 sf at 1888 Century Park East, which is marks the accounting firm’s first office in Los Angeles. Blake Mirkin of CBRE represented Reznick Group, while Andrew Goodman represented the landlord, Equity Office Properties & Broadway Partners, in-house.

Mirkin comments that the lease “demonstrates that West L.A. continues to be a market that draws new tenants from other areas of the country, even amidst today’s sluggish market conditions.” The property is a 21-story building with approximately 484,154 sf of rentable space.